The Catalan High Court ruled that the nonresident income tax assessment issued to a MotoGP rider for income linked to races in which he did not ultimately take part was unjustified

Spain - 02 / 17 / 2026

The judgment, handed down in the context of a judicial review proceeding, considered the contested original assessment unjustified, as it included in the motorcycle rider’s nonresident income tax base income obtained in the Catalan Grand Prix MotoGP race, because although the rider was registered to participate in it, he did not ultimately race due to an accident that took place at the start of the race.

The Catalan High Court handed down a judgment holding that the assessment and penalty imposed on a well-known MotoGP rider, for the failure to report in his nonresident income tax return his economic activities in Spain, were unjustified.

The case originated from the inspection proceedings initiated by the Regional Inspection Office of the Catalan Special Provincial Tax Office of the Spanish State Tax Agency in relation to personal income tax, wealth tax, and nonresident income tax for fiscal years 2005 and 2006, which concluded with the signing of an assessment on a contested basis and the imposition of the corresponding penalty. The reason for the assessment was the rider’s failure to report in his 2006 nonresident income tax return some of the income obtained by the rider from economic activities carried out in Spain.

During the inspection activity, the inspectors detected evidence of the possible commission of an offense against the Public Finance Authority, for which reason the case file was forwarded to the Public Prosecutor's Office. This criminal proceeding ended with the rider’s being acquitted.

As the rider disagreed with both the tax assessment and the penalty, he filed a claim with the Catalan Regional Economic-Administrative Tribunal, which issued a decision rejecting the claim. That decision was subsequently appealed to the Judicial Review Chamber of the Catalan High Court That court has ultimately handed down a judgment partially upholding the rider’s claims.

Criteria on the earning of income and effective participation in the evento

Notwithstanding a debate on the possible statute-barring of the 2006 nonresident income tax return on the grounds that the maximum period for concluding the inspection procedure was exceeded, on the existence of certain formal defects, and on whether the penalties imposed are lawful, the judgment focuses, for the purposes of interest here, on determining whether the income adjusted – specifically, the income relating to the economic activities carried out in Spain as a motorcycle racer – is correct.

The rider sustained that the nonresident income tax base was determined incorrectly with regard to the inclusion of certain income obtained in Spain, allegedly derived from races held in Spanish territory, it having been evidenced that he did not participate in the races. This was proven with the event results certificate, which showed that the rider was not at the starting grid because he had suffered an accident that caused a fractured collarbone and temporary transient amnesia, which forced him to withdraw before the race began.

As a consequence, he did not take the official start and was recorded as DNS (Did Not Start) in the results. Therefore, as he did not participate in the race, it cannot be considered that he obtained income in Spain.

The Catalan Regional Economic-Administrative Tribunal considered it undisputed that in the year 2006, the rider had a contract with his team and that payments had been made linked to a race calendar in Spain, regardless of whether or not he raced in them due to injury. It concluded that said income was considered obtained in Spain and, thus, should have been included in the nonresident income tax base, since participation in the competition was considered irrelevant to the final outcome.

The Judicial Review Chamber of the Catalan High Court validated the rider’s submissions in this regard, concluding that the assessment and the penalty derived from the inclusion of the income from economic activities in the 2026 nonresident income tax return are unjustified, thus overturning them, as well as the decision of the Catalan Regional Economic-Administrative Tribunal.

The court noted that although the rider formed part of the race and was on the grid as a rider, he did not actually participate in the race due to the accident suffered. Holding otherwise would “lead to the absurd result” of taxing an event that did not materialize in its essential part.